Full Decision
Further clarity about limitation periods in CAT cases….
Limitation period starts to run not from the date of CAT designation, but from the date benefits claimed for, based on that designation, are denied.
The Applicant and Co-operators General Insurance Company is a decision of the Licence Appeal Tribunal providing further clarity about limitation periods surrounding catastrophic impairment designations.
The facts are as follows:
- The applicant was involved in a motor vehicle accident in November 2003 and filed for accident benefits under the Nov. 1, 1996 SABS.
- In March 2012, the insurer denied the applicant’s attendant care benefits. The benefits were only available for two years, unless the applicant was catastrophically impaired.
- In January 2014 the insured submitted an Application to Determine Catastrophic Impairment (OCF-19) and was deemed CAT on January 8, 2015.
- The applicant underwent two IEs for attendant care benefits in May and June 2016. It was determined based on those IEs that the applicant required certain attendant care services.
- The applicant submitted housekeeping and attendant care expenses in November 2017.
- Co-operators denied attendant care on December 4, 2017 relying upon its March 2012 denial and claiming the limitation period had expired.
There was some discussion in this case about whether or not there was a proper denial to trigger a limitation period. It seems that much of the applicant’s argument centered around this issue. But the Vice Chair did not spend a lot of time with this argument. It was, however, confirmed that insurers are required to give clear and unequivocal denials and the language must be clear, straightforward and directed to an unsophisticated person.
Even assuming there was a clear and unequivocal denial, the LAT found that the limitation period had not expired.
The LAT’s reasoning centered around Tomec v. Economical Mutual Insurance Company, a decision of the Ontario Court of Appeal. In Tomec, the insured was denied housekeeping and attendant care benefits in 2010. They were denied because those benefits were only available for two years, unless an insured was catastrophically impaired. Years later, as a result of worsening health, the insured was determined to be catastrophically impaired. She therefore applied for continued housekeeping and attendant care benefits on that basis. She was denied for failing to dispute the 2010 denial within two years. The Court of Appeal found she was not out of time. She had no right to seek housekeeping and attendant care benefits beyond the two years unless she was CAT. She was not deemed to be CAT until 2015, years after the denial. How could she dispute something she was not yet entitled to have? The Court essentially read-in the principle of discoverability to SABS limitation periods.
Co-operators argued the limitation clock started to run as of the date the applicant was designated CAT. The insured did not dispute the 2012 denial within two years of being deemed CAT. Once he was determined to be CAT, his injury was “discovered”. By then he had all the material facts for his cause of action to accrue. He knew he could dispute the 2012 denial based on his CAT designation. Therefore, he was out of time.
Vice Chair Maureen Helt disagreed. The limitation period is set out in s. 280(1) of the Insurance Act. It says that an insured has two years to dispute after a failure to pay. The insured applied for continued benefits on the basis of being CAT. The first denial thereafter was in December 2017. The insured disputed that denial within two years. He is therefore within the limitation period.
In other words, the LAT found that in this context, the limitation period starts to run not from the date of the CAT designation, but from the date benefits claimed for, based on that designation, are denied.
